Plenty of iPhone developers think $0.99 is the sweet spot for their applications and games, but can they make money from it? Majic Jungle - the company behind Chopper and DuckDuckDuck - says not.

Founder David Frampton has written a blog post based on his experiences on the App Store, and he advises against dropping prices below $1.

"The biggest problem with setting an app price at the lowest possible value is that there is no room to move," he writes. "Dropping the price may seem a good revenue increase initially, but sales will tail off. Then what can you do? Nothing. You’re selling two copies a day at 99c."

He also warns that a 99-cent app will get many one-star reviews, particularly if you later try to put the price up.

Perhaps more worryingly, he points out that iPhone users are clearly much more keen to download free games, from his experience with DuckDuckDuck, which was being downloaded more than 5,000 times a day over Christmas, when he'd made it free, but then dropped to 20 sales a day when he put the price back up to $0.99.

"My stats indicate that iPhone owners are about 250 times more likely to download a free app than a 99c app," writes Frampton. "So people are way way way more keen to download whatever the crap they can get for free than anything half decent that costs a dollar."

He also points out that when games are high in the App Store charts, they can get higher with a lower price, but that if they're out of the charts, the developer will earn more revenue from a higher price.

"The App Store tail is getting fatter. 6 months ago if you weren’t featured, you made nothing. 4 months ago, if you weren’t in the top 100 you made nothing. Now… it’s getting better… I think it will get better still… #500 at >$2.99 is probably making a living."

He also says that Chopper is making him $500 a day at the moment. The full post is essential reading for any indie iPhone developer.